AI Power Wars | Emad Mostaque

web 3's grown up a lot like there are actually Primitives now that are emerging that could be a substrate for Collective decentralized distributed AI by the people for the people whereas on the centralized thing again it's a different Paradigm which is the all powerful AGI my thing is you can't beat centralized AI with another centralized organization I think what we should build for an AGI this generalized intelligence is the human collective intelligence Amplified human intelligence something that uplifts us all and acts like a swarm the alternative picture being presented here by Deep Mind opener and is machine

gol welcome to bank list where we explore the frontier of Internet money and internet finance and today on Bank list we explore the frontier of decentralized AI emad MAAC the founder and former CEO of sibility AI is on the show today emad recently left cability AI citing you can't beat centralized AI with more centralized Ai and announced his intention to work in the nebulous field of decentralized ai decentralized ai what exactly is that why does emad want to put an AI model into the hands

of every individual with a compute power to run it is there a race between centralized AI versus decentralized AI or do they each bring something to the table why are the interests of governments Nations and communities of the world align with the desires of decentralized AI why will this revolution be deflationary for developing countries but an accelerant for the developing ones Banos Nation if you haven't gathered this by now it's an AI episode today because it's seems the world of decentralized crypto protocols and the rise of AI are converging faster than ever and we at bank list are just

trying to keep up one podcast at a time Ryan the AI is out and unplugged for this episode hanging out with his AI wife and AI children giving us a chance to catch up as he takes a much needed break from the internet and meme coins today let's go ahead and get right into this episode with EAD mosac but first a moment to talk about some of these fantastic sponsors that make the show possible Bist Nation super excited to introduce you to emad mosac who has a really interesting background was once a hedge fund manager but moved to finance to become the CEO and founder of stability AI back in 2020 the company

behind stable diffusion which is a text to image machine learning model that Rose a prominence alongside chat gbt I met Imad about a year ago during the AI crypto week at zalo so emad is no stranger to crypto in web 3 which I think will become evident shortly recently emad announced his departure from stability AI with the intent to pursue decentralized AI a headline from TechCrunch R stability AI CEO resigns because you're not going to beat centralized AI with more centralized AI emad welcome to bankless pleasure thanks

for having me so as AI as a topic Imad went from zero to 100 just extremely quickly in the last like two years or so and you've experienced that entire surge of attention activity investment all very very quickly uh what's that been like what's it been like writing that wave what did you learn about yourself about the world about other people what was all of that whole thing like so you know you have web 3 time which is faster than human time totally AI time is like faster than that oh boy I do not envy that yeah stability we hired our first

developer two years ago mhm and since then we've had 330 million downloads of models we built or contributed to and that's insane in like two years so I remember when stable Fusion first came out in August of 2022 on uh cumulative developer stars on GitHub it overtook Bitcoin and ethereum in like 3 months and so there's being in a normal startup scale and hypers scaling then there is that craziness and then on top of that there's all of a sudden you're like

talking to the king of England or like you know Congressional people about how this can destroy the world or other things like that that's just a lot it's a lot yeah yeah what factors would you say plated to all of that well the fact that it's transformative technology right I don't think we've ever seen a technology be adopted as quickly as this like with we I think you know we're all passionate about decentralization sovereignty but you know we've been building a system largely outside the existing system all the money's been made and lost at the edges and we've been bootstrapping economic incentives

whereas this technology all of a sudden Google is a generative I first company Microsoft is a generative I first company NVIDIA is A2 trillion generative I first company we've never seen anything like that before I want to just get right into the deep end with this conversation about the pivot pivot maybe you would call it correct me if I'm wrong into the world of what we are now calling decentralized AI I think that if you've been paying attention to this world inside of the crypto industry it's been a theme for like coming up on a year now um but it's also very interesting to hear things from perhaps

yours perspective who's coming from you know the AI World specifically rather than coming from from inside crypto directly so overall just like what does it mean what does decentralized AI mean to you yeah so actually I've been in uh web 3 since 2011 so oh wow earlier than us yeah my college um coursemate was uh Ben who co-founded bitm with Arthur and then I built kind of TCR systems did system audits other things in 2016 2017 stability originally was

actually meant to be a dow of dows because we launched these communities to get the talent and I B the supercomput and others so our seed investors were seed club and lemis capital and CFG so all crypto but then I realized there was no intelligence in Daz so we had to build it ourselves first right yes this is something we've learned over the years as well well we have because we we've kind of not learned the mistakes of direct democracy and other things and so Dows and more like you know do decentralized not really decentralized organizations um certainly not autonomous and smart contracts are a bit

dumb as well so you know it was kind of a whole journey because you've got these two paradigms of like autocracy and then distributed decentralization and so it started Dow Dows and I quickly realized crap I have to centralize it so I took control and then push forward the the research agenda to build these things but you know there was always this thing at the back of my mind which is like this is going to be used to teach your kids or my kids or whoever right it's going to be used to Doos our Healthcare who governs that like part of the debates we had about AGI which is this

very complicated debate you know like is it Terminator is it Utopia everything like who decides because if you look at what um open AI says for example they say AGI will end democracy end capitalism and kill us all and it' be nice to have someone be part of that debate opposed to a few people in Silicon Valley right like it may not be correct like I signed the fli six-month pause letter last summer but who should be governing this who should be feeding in this data because data is the most important thing these are always things that at the back of my mind but the

folks over the last few years was let's build the best models of every type so stability doesn't just do image models we have the best protein folding model we have the best video model other than Sora cuz Sora is not released but stable video is released it beats Runway and P with the best 3D model you can generate 3D mes 0.5 seconds all thanks to this combination of community core team and really differentiated background so moving into decentralized space again and going this full time is because I was having to think about this particularly as Sam mman takes over open AI again and his reappointment to the

board is a bit of a thumbs up middle finger up to everyone because he's like the board can find me now look I'm in charge of the nonprofit again there is no governance even though I respect people there who should be running this and where does web 3 fit in this it's the governance of the day data it's in the self- Sovereign identity self- Sovereign Ai and it's in the distribution of this technology so it's available to everyone cuz right now what you're seeing is increasing centralization and are you going to out accelerate openai when Microsoft's building a 100 billion dollar supercomputer you know project Stargate

probably not right but do you need to build1 billion supercomputers probably not but you do need to take the best out of web 3 on a governance distribution and then alignment perspective and I think we'll have safer better AI that uplifts everyone as a result of that one thing when you listen to um Sam Alman talk about the structure of open AI in the board uh the word governance comes up quite frequently uh because he's thinking very much in the future he is thinking in a world in which this super intelligent machine does exist and all

of a sudden uh questions over its governance become critically important uh and you know you know so Props to Sam for having this kind of uh foresight similarly in the crypto space we also think about governance uh quite a lot like Dows that's a conversation of governance governance over networks governance over apps and so we are also experimenting in governance and this is one of the doors I will say that web 3 has opened but definitely not solved and we've seen the governance failures of

the open AI board and you can looked into crypto and also see plenty of governance failures uh and so one thing we can say about crypto is is like at least we are trying but we don't have necessarily any governance Solutions here um are is how are you thinking that this proceeds forward when one of the biggest issues in the world of um artificial intelligence is governance well look we haven't figured out how to align humans how are we going to align AI right right I think that's one of the things that we always thinking about I think what I've seen is that there's a lot of real thought being put towards

governance alignment and things like that but there are lots of misnomers like big computers substitute for really bad data you know so one of the things is data quality data Providence Data Tracking we're seeing this wave of potential deep fake and superhuman generative AI that requires again a Provence kind of solution there's a distribution of the wealth around this you see billion trillion dollar companies kind of emerging from almost nothing who should kind of have some of that ownership there is the question of attribution of data going in we opted

out a billion images from our image model because we thought it was the right thing to do didn't have to do it legally Etc so nobody's got a solution because this is a problem for Humanity and it's happening at a time when entire Industries are about to be completely revolutionized I was on a panel with Nat Friedman the former CEO of GitHub last Monday at abundance 360 this conference by P mandis and he made this really good analogy because I said well I think that these like really talented graduates that can do just about everything and they try bit too hard they hallucinate he said yeah and we just discovered a continent called AI Atlantis or a

Atlantis if you want to call it that way where's 100 billion of them that's economic upheaval you know so what I'm really looking at is I believe that every nation should have their own AIS and data sets that they own because no government will run on closed AI it'll be open and transparent because you have to know what the curriculum is you have to know you are what you eat and then in every sector there's a transformation that occurs from this but we need to coordinate the response because we don't know how fast it happens because one of the things that's happening here is like just over a year ago when chat GPT came

every head teacher in the world had to answer the same question I can't set essays for homework again or can I and we're seeing a lot of those things happening right now and so my basic move here is to move towards building a substrate for collective intelligence as opposed to collected intelligence Amplified human intelligence versus AGI Distributing the benefits and getting together the smartest people hopefully that can figure out what the Practical governance of these data sets these models and other things are because they impact Society that's a discussion that

has to be had and it should be the smartest most passionate people of every nation looking out for their Nations it should be the smartest most passionate people in healthcare and education and others thinking how can we fundamentally change this for good you know leveraging this technology that is transformative and I going to talk about that you know and it has to be people that have a holistic view thinking about oh my god well finances about to be messed up completely as an example and again I can dig into that what do we do about it and actually building not only the uh creation bit but the defense spits

around this as well like our infrastructure you saw the XZ kind of thing is incredibly susceptible to attacks from this and so we have to build a new robust infrastructure incorporating all these elements and I think again the only way to do that is not a small dedicated team in Silicon Valley it's distributed teams of people working around the world solving this problem which is the real Manhattan Project but it's not against the Russians or anything like that it's against saric infrastructure and very unpleasant race conditions also I don't think that there's very few bad people in this as

well so even though you know crap on open Ai and things like that there are a lot of passionate people trying super hard there it's just again they're caught in very bad local Maxima because it is so powerful the natural thing is to control control control yes yeah yeah and it's uh also the hardest thing to to give up as well your your quote you're not going to be centralized AI with more centralized AI there's uh a number of different ways I could read into that like first is that like your mission is that a a a goal that you have personally is to beat centralized

AI yeah I mean like I ran a China a fund and as a video game investor and then it suddenly became the China social credit score and that's a vision of the future gamified life you know and some people are happy with that but I basically going to 1984 on steroids if you got a few people controlling this amazingly powerful technology deciding when it's going to happen you know who gets it like when does this technology when does AGI get to Pakistan or Bangladesh well never because they can't be trusted with it right but then this AGI whatever you may Define as could be used to educate

every child or give universal healthcare so who gets to make those decisions so my thing was AI for the People by the people like um I in 2020 I was leading one of the United Nations backed AI initiatives against covid-19 I was lead architect to organize Global Co knowledge and make it accessible through Ai and pretty much every AI company that promised to back me didn't give me the technology because it was dangerous I was like we're saving lives and that's the origin of stability and how it moved to this you know but like I said we're not quite mature enough and this is one

of the fascinating things as you look at the L rollups as you look at the data authenticity things web 3 is grown up a lot like there are actually Primitives now that are emerging that could be a substrate for Collective decentralized distributed AI by the people for the people whereas on the centralized thing again it's a different Paradigm which is the all powerful AGI so my thing is you can't beat centralized AI with centralized organization I think what we should build for an AGI this generalized intelligence is the human collective

intelligence Amplified human intelligence something that uplifts us all and acts like a swarm the alternative picture being presented here by Deep Mind opener and others is the machine God you know and who controls machine God I think it's impossible to control machine God you know because how do you control someone more capable than you you remove its freedom and I don't really feel very comfortable with that instead I'd rather build better data sets that that feed that machine God or collective intelligence bring this technology to everyone so we can have robust infrastructure that's battle tested and really focus on uplifting

Humanity through Universal healthc care education proper financial rails and self- Sovereign AI to go with self- Sovereign identity maybe this conversation isn't really about um uh centralized AI versus decentralized AI um mainly because we there are some platforms out there that are capturing a ton of attention in the crypto space that are like decentralized compute um uh platforms or decentralized inference platforms and they do a lot of the very similar things that centralized AI

platforms do um but they have this distributed context right like instead of having and centralizing all the compute into one single like data center uh the margins can contribute their uh compute to this one coordinating platform and we're calling this like decentralized AI but my intuition about this is that the outcomes are not the same whereas the products that come out of decentralized AI or like decentralized AI aligned uh infrastructure are not the same products are not offering the same services to

the world as a centralized AI platform would like open AI or Microsoft uh this is my my intuition is this kind of what you were saying with like rather than creating like an an alternative to AGI we're just pushing more intelligence to the margins what do you think about this yeah well I do have this vision of an intelligent internet where every single person company country culture as an AI working for them that represents them and flipping that intelligence thing but yeah I think it's not open source or closed Source I think they're complimentary they're your own graduates

that work for you and the Consultants that you bring in like I was the original funer of mid Journey you know I got it off the ground with a grant to cover all the A1 100s for the beta and supported by inviting people in and when David said do we want open source I said no it's fine you need to have these closed and open Solutions but there must be an open solution it must be distributed and we must forg out the Govern again no regulated industry eventually is going to operate on a closed blackbox model right you must know what the data is there was a paper by anthropic

recently we all knew about it but they actually put on a paper called sleeper agents so basically you put some data into a language model and you can't detect this you can't tune it out or anything but if you say 2025 or dosv or whatever the model tends evil just with that little bit of poisoning so how can you trust this for any regulated industry to run a government education Healthcare Etc so my take is let's build open as a default substrate for this there is a gap here where government sectors and others

would welcome that and then it means one of the defaults will be open versus everything being centralized and closed eventually that'll be open but controlled by a few people so this is a question of control governance spread acceleration distribution and like I said I think if nobody none of us get together and do this right now the alternative will be the largely the panoptica the 1984 type thing you know where what happens if you get excluded like it's amazing like in 2023 I pointed

out that it was 2022 openai released Del but they banned it for all ukrainians and all Ukrainian content in the middle of the Ukrainian conflict think about that censorship right so we brought over a bunch of Ukrainian developers out of the war zone and other things and they were just a asked why you can never get a straight answer but what if they were the only image generator the rest of the world can do it but not ukrainians why because of some sanctional list somewhere that feels a bit wrong that some people have superhuman creativity Powers raising the

floor and other people don't so we must create this option and then I think it can create this default of an AI that we all own and again this collective intelligence as the emergent property versus this AGI which may or may not happen which definitely someone will try to control someone that we don't elect someone that we don't know and we don't have any say in cuz realistically for our infrastructure of the knowledge this upgrade of the human brain as it were rocket ships of the mind we shouldn't

have to rely on anyone being nice or fair or good me or everyone else we should have some systems in place for the governance of that and again they said it's hard but let's do it transparently and let's put pressure on people to figure this out you know I'm GRE and gallon that's what crypto's good at coordination mechanisms the idea of credible neutrality certainly comes to mind uh this is something that's very very important in the crypto industry where uh the protocols the platforms that are more credibly neutral tend to Garner more applications to build on

them because people appreciate when the foundations that they are building their structures on be it a startup or another application uh when that platform is considered fair and Equitable then more people will will build there uh and simply was due to the fairness and I think that's maybe what I'm hearing you aspire to in the AI space yeah yeah I think it's the fairness it's the transparency but also you know it's about this accountability and other things there again we should have

permissionless trustless systems right because this is an upgrade in the Floor of humanity you can suddenly C draw a paint seeing better raise of the floor what if this is not evenly spread it means that you'll have superhuman AI augmented people and everyone else you know and that doesn't feel like a fair future um but also we should rely on the system to make some of these decisions rather than individuals randomly like who decided the data mix at stability

pretty much me you know and I could do whatever I want to with it I could poisoned it I didn't but you know I could have could make it say mad is fantastic and then all of a sudden it gets loaded on every laptop and put in front of millions of kids that's kind of wrong right so we need to have the verifiability accountability neutrality and AI isn't infrastructure but it should be you wouldn't have private companies owning every single Road you know deciding who can go on those roads or every single kind of

traffic thing and other things like that so there was this big shift but unfortunately given the pace it's going we don't have long to make that shift right now the defaults will be established CU everyone's now like what's our gener strategy from a country to a company to a personal level and if the only options are the trillion dollar companies you'll go with the trillion dollar companies right right yeah so you're saying you said earlier that uh it's not um versus uh centralized AI versus decentralized AI it's more of um having the options to have both but also

it does kind of feels like a race yeah just to correct that it's not centralized or decentralized for the everyday stuff but if we ever do get into an AGI type scenario then I think it very much is an either all right because the AGI suppresses its Alternatives yes and again this gets into very like handwavy territory right sure but is the default a collective swarm intelligence that's diverse or is it a single million GPU AGI that then goes and takes over various institutions

with its dlet voice based on Scarlet Hanssen and then decides what it wants to do you know I do feel that there is a bit of that I don't think that'll happen but I could be wrong so I'd rather you know let's set some good defaults certainly and and I think it's your thought that the decentralized AI can be a check on centralized AI yeah I mean like everyone hates to know it all which is Agi right and right now the AGI is trained on the whole of the internet and no wonder it turns out crazy build better data sets and that contributes to

smarter more balanced AGI on a centralized basis but then a swarm intelligence I think will outcompete to centralized intelligence you know like why don't we have all of the knowledge of Science and our fingertips and can recombine and adjust it that's the human Colossus that is the Swarm we can split the atom we can go to space but our existing infrastructure is not based is based on text and lossy information formats it's black and white we can upgrade that we can upgrade all of our systems and then achieve much more so we should do that and then it's Collective human intelligence that represents us

works for us and is aligned with us versus being aligned for profit maximization so like YouTube used to um it optimizes for engaging Clips which are more extremes then optimize for Isis mhm that was the algorith they didn't mean that but we know that organizations are slow Dum AI that optimize for certain things that are maybe not in line with our requests or our requirements education is about removing agency not giving agency to every kid Healthcare is about sickcare not Healthcare governments are about pushing the people down rather than uplifting

them so that's why I think the defaults are good and that's positive for everyone on the way but then again the AGI that could come out of that centralized or not could be a swarm AGI or it could be this centralized thing that's based on better data sets because they suddenly become available from every country and culture and everything like that so it's a win-win either way I want to drop a metaphor your way and see how you react to it the whole centralized AGI versus swarm intelligence feels uh decently parallel to Central planning versus uh Market Bas uh based planning where you have the

central planning where the central AGI which has all the data which has all the compute knows it all and and makes its Central decisions as to where to act next versus form intelligence which is well every single node on the network has its own information uh and it's more specialized in its particular area and it's a better fit for its particular area and this is like how capitalism works right markets come together and they make trades and the information is expressed in in market prices uh how do you like this metaphor and and can you continue it for me yeah I think that's a

very reasonable one because this came about due to increased information density that happened because all the finan is about securitization leverage telling a story about an asset and then how will you tell it as it were and so capitalis emerged because we had more and more information about assets and so you had this market economy occurring and you're seeing the first elements of that in crypto xai with bit tenso and some of these other things but you do need a bit of central coordination and this is what's really interesting we can have co-pilots and Pilots because we have a lot of global solutions that lack local coordination but when you look at J AI what it does it understands context and

stories stable diffusion 100,000 gigs of images into a gigabyte something like GPT 4 or stable LM language models 4 trillion words in a gigabyte you know they can act as local coordinators and then you have globalized Pilots like AI market makers and other things that can allocate resources more intelligently this is incredibly powerful because again it has elements of centralization and decentralization but it is this upgraded infrastructure because when you're writing down notes from this podcast you're doing an investment memo you lose so much

information that never needs to be lost again and that's what allows a new type of intelligence for a coordinated swarm with different objective functions that can out compete these slow sclerotic organizations which ultimately can't manage what they can't measure so they manage all of the agency and Independence out of us you know this is the seeing like the state kind of book you know like the centralized planning drove through Villages and removed all the characteristics so that they could have straight roads but it's inherently

dehumanizing and removing of characteristics whereas this technology I mean like when you go and Del you're like make it buffer make him buffer make him buffer and it understands the nature of buffness you know or beauty or these other things is that missing piece of context you know the caran you know rest in peace type one versus type two thinking and that's why this swarm intelligence is just so powerful and such a positive view of the future because all that intelligence that was centralized can come to the edge and we can build Pilots to coordinate the resources that we need to solve cancer or hunger or climate or anything else

like that and it's I think again it's better to have that owned by the people for the People by the people versus owned by a few companies that have unclear objective functions one thing I keep on coming back to is the timing of this whole thing where central planning can move faster if you have like a you know this is the reason why Dows can always uh seem to be moving much slower versus their more centralized counterpart right uh and that would be great if we had you know generations and

R to iterate upon but it doesn't really feel like that with AI this AI it feels like a big time squeeze uh and one thing that we can do both well and terribly in crypto is coordinate like we're good at coordination and we're also terrible at coordination uh and so like I'm concerned about like this market-based uh swarm intelligence infrastructure takes a lot of moving pieces and a lot of coordination to really get right meanwhile Sam and open AI are like

seemingly light years ahead of everyone else this is kind of just like my fear at a high level um how would you reflect upon this so you know in two years from the first developer we built the state-of-the-art model in every modality except for large language like even stable LMR Edge model go to LM Studio download it it runs on one and a half gigabytes on a MacBook Air faster than you can read and performs higher than Falcon 40b the next version performs higher than llama 70b on a gigabyte best image model best we managed to prove that you can and compete because what

open AI had is they didn't have massive breakthroughs the team is excellent they built gigantic super compute infrastructure but it was like cooking a steak for longer it makes tender so big computers a substitute for crap data we can get really amazing data through coordination I think that's kind of key unlock but then you need to have a combination of coordinated and decentralized so like my approach to this is for every single sector to build kickass teams that do geni first how can Education Health and other things be improved approved with everything that we've got and then do that for every

nation and give back ownership to the people and then you'll get the smartest Indonesians working on Indonesia for Indonesia the Indonesian data sets and models backed by the powers that be in Indonesia without having to count out to the governments repeated for every single country and they repeated for every single sector and then you get rich data sets model bases and you can mix and match them together to drive real how do we educate every kid in Malawi how do we upgrade the Indonesian Healthcare System you're diagnosed with cancer you have an AI That's gp4 level and beats human doctors and empathy that

guides you every step of the way so you're not alone multiplied by every condition so I think that you need the combination I don't think a lot of these emerging AI infrastructure plays are good enough it's like again the Builder and they will come I think you do need to have coordinated teams attacking this and each part of the problem and then you support people that are building self- Sovereign identity supporting attestation rails and others and you accelerate that with AI and hopefully they can can become part of this piece cuz what you really want to build is the human OS crypto had identity value

transfer Ela intelligence almost all the value in web 2 was from intelligence although it was this deep it was this kind of classical AI you know future like the past we have a new type of intelligence that can upgrade web 3 and implement it but you need to have that bridge to the real world you need to have dedicated teams who are passionate about focused on this and that's why I don't think you need to boost strap economic incentives through tokens or others again there is value in in certain areas I can talk about some of the protocols but the time is now because even if we stop today G stops

today the world changes but it's not going to it's the worst that'll ever be which is crazy like I look at it like stable diffusion Excel when we released it last summer was like 20 seconds for an image now we can have that quality at 300 images a second and it'll break a thousand with the new NV video chips how insane is that it makes no sense you know use Claude 3 it makes no sense it's like really nice to talk to better than a human you know so in in the web 3 space in the